Bulls rack up big profits in $PANW

Palo Alto Networks (PANW) surged today, turning large intraweek gains for option positions.

On Feb. 22, Market Rebellion’s Unusual Activity Service found that 3,250 Weekly $525 calls were bought for $5.20 to $6.42 as part of a bullish spread above the existing open interest of 94 contracts with shares at $476.20.

Those calls sold for $43.55 today, at least 6.5 times their purchase prices. The stock rose 19.42% at the same time, reflecting the kind of leverage that options can provide.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

PANW climbed 5.52% today to close at $569.75.